The rental market continues to hand down an unprecedented number of concessions, according to a monthly report from Douglas Elliman.
In an effort to keep already record low vacancy rates static, Elliman found that, for the 42nd consecutive month, Manhattan’s market share of concessions continued to rise while vacancy rates hover at 1.65 percent after hitting a nine-year monthly low of 1.49 percent for October.
Concessions in both Brooklyn and Queens also rose in part due to new housing stock.
Likewise, a report from Citi Habitats released this week showed that 34 percent of rental transactions brokered through the firm offered a free month’s rent and/or payment of the broker’s fee to help attract renters.
That figure is up from 29 percent during the previous month and mark’s the highest rate since March when concessions made their way into 35 percent of new leases.
Though vacancy rates have risen slightly, and for the third consecutive month, according to Citi Habitats, the overall trend has still been a downward one. In 2017 Manhattan’s vacancy rate was 2.14 percent compared to the current 1.55 percent in the Citi Habitats report.
“In November, the rental market continued to shift to the tenants’ favor with the highest levels of both inventory and landlord concessions since March,” said Gary Malin, president of Citi Habitats.
As concessions rise and vacancy rates drop, however, median rent prices have continued to climb due to an influx of new development that has skewed prices upwards. The median rental price in Manhattan, the report shows, has increased by 1.5 percent since November 2017.
Despite rising prices, on a year-over-year basis renters are still paying less. With concessions factored in, net effective rent is 1.9 percent less than it was last year.
Mirroring trends in Manhattan, Brooklyn saw 34 consecutive months of rising concessions while the median effective rent fell year-over-year and for the third time in four months.
An overwhelming 80 percent of Brooklyn’s buildings now offer concessions according to the Douglas Elliman market report.
According to Citi Habitats, Dumbo still stands as Brooklyn’s most expensive neighborhood, clocking in with a $4,925 median rental price.
In New York’s buzziest neighborhood, Queens, despite the ripple effects of Amazon’s announcement that it plans to open up a new headquarters in Long Island City, the rental market has yet to experience a noticeable shift.
While Amazon hasn’t yet begun affecting residential markets, an influx of new developments in Queens have pushed prices higher, according to the report. New developments accounted for 46 percent of the overall market while concessions reflected the rate in Manhattan at 80 percent.
As a result of uncertainty in the rental market, November reflected an ongoing trend of renter’s “camping out” as opposed to choosing to move properties.